Based on sales data from the Greater Capital Area Association of Realtors, Kendrick said, single-family houses and townhouses increased in value by 15 percent from 2003 to 2004, while condominium and cooperative units rose by 23 percent.
Branham said that condos and co-ops are still catching up after years of being undervalued and that he expects they will outpace single-family houses in this year's assessments as well.
William Lonegan and Apollonaro Perez build a fireplace in the Brookland neighborhood. Housing, new and old, is in great demand in the District.
(Photos Kevin Clark -- The Washington Post)
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"Historically, the traditional single-family detached house is the first to rapidly appreciate," he said. "After that, the more nontraditional housing types such as townhouses increase. Then there were the condos, and now we are seeing stock-ownership properties steadily increasing."
District real estate prices have been skyrocketing since the mid- to late-1990s, when the city began to recover from years of political and fiscal turmoil and rampant crime that had prompted D.C. residents interested in short commutes and urban environments to consider Bethesda, Arlington, Alexandria and other close-in suburbs.
The development community, which essentially had stopped building residences in the city, jumped back into business, launching a boom that has transformed many neighborhoods. Long-empty lots and crumbling buildings have given way to attractive new townhouse and apartment complexes. Neighborhoods once considered dangerous and isolated are now billed as lively, thriving and close to downtown.
But the supply has not kept up with demand. Houses and condos in neighborhoods from Cleveland Park to Bloomingdale rarely stay on the market longer than a few weeks. New projects downtown, in Logan Circle and along the U Street corridor often sell out before construction begins, as suburban traffic worsens, the D.C. crime rate continues to drop and the attraction of close-in living keeps growing.
Not even the Sept. 11, 2001, terror attacks, which some said might scare people away from locations close to downtown, seemed to dampen the demand.
As a result, prices continue to rise -- not just in tony, long-established neighborhoods such as Georgetown, Woodley Park and Spring Valley but also in formerly working-class areas such as Petworth, Bloomingdale and H Street NE.
Upscale professionals, most of them white, are moving into neighborhoods that for decades had been overwhelmingly black or Latino, as they clamor to lay claim to new condos, fixer-upper rowhouses or already transformed Victorians.
District officials are grappling with how to protect residents from the city's success. Last year, the city reduced the cap on annual property tax increases from 25 percent to 12 percent and increased the homestead deduction from $30,000 to $38,000. So homeowners whose assessments rise by 20 percent or even 30 percent this year will have to pay a maximum of 12 percent over what they paid last year in property taxes, Branham said.
Still, D.C. Council members and others worry that rising prices are locking out prospective home buyers who want to live in the neighborhoods where they grew up and putting pressure on elderly homeowners on fixed incomes who can't handle the steady rise of property taxes.
Some homeowners are fighting back, accusing the city of punishing them with inflated assessments and crushing tax bills while it socks away record revenues and reserves.
Peter Craig, a Cleveland Park homeowner, has been waging a legal fight against the city, saying its assessment process is secretive, unfair and arbitrary. Ninety-eight homeowners have signed onto his class-action lawsuit, which is awaiting a judge's decision. "There's going to be a howl when the new assessments come out," Craig said.
Staff writer Debbi Wilgoren contributed to this report.
Tomorrow: The personal toll. How rising assessments are affecting the residents of one neighborhood.
